Adjusted earnings-related unemployment allowance
Applying for adjusted earnings-related unemployment allowance
Income and adjusted allowance
Maximum amount of adjusted allowance
Adjusted allowance and lay-off
Working time limit
Meeting the work requirement
Part-time workers and partially laid-off workers are entitled to adjusted allowance. You can also get adjusted allowance for full-time work lasting not more than two weeks. For allowance to be paid, applicants must be registered as jobseekers with the TE Office. In addition, you also have to fulfill the general requirements for unemployment allowance.
Your unemployment allowance will be lowered based on your salary.
You might be eligible for adjusted unemployment allowance in the following situations:
- you have earnings from a part-time job. If you have reduced your working hours on your own initiative, you cannot receive adjusted unemployment allowance.
- your working hours have been reduced due to a temporary lay -off
- you earn income from a temporary full-time job that lasts for a maximum of 2 weeks
- you have income from self-employment or entrepreneurial activities
Your employment contract is considered full-time if working hours in your contract exceed 80 % of a full-time employee’s working hours. For example 35 hours a week is considered full-time. If your hours in your contract are maximum 80 % your employment is considered part-time even if you have had more working hours. If your according to your contract your working hours are 25-37.5 per week, your contract is considered part-time even if you have mostly worked full time.
A salary or income from a business of maximum € 300 per month or € 279 for a week period does not affect the daily allowance. Half of any income exceeding € 300 will reduce the daily allowance. The salary affects your allowance in the same period the salary is paid. However, the maximum amount of adjusted allowance and pay from employment may only be maximum 100 % of the pay used as the basis for determining your allowance. In calculating the maximum amount, the exempt amount of € 300 is not taken into account – all earned income counts.
EXCEPTION: The amount of income that does not affect your allowance (exempt amount), has been temporarily raised to € 500/month and 465 € / 4 weeks between June 1, 2020 and September 30, 2021.
Adjusted earnings-related allowances are applied for in four-week or monthly periods, depending on your pay period. If your pay period is four weeks your application period is also four weeks. If you pay period is a month, you apply fill out the application for a month as well. If you happen to have a pay period that is neither four weeks nor one month, you fill out the application for one month or four weeks depending on what best fits your pay period. The law doesn’t allow other application periods.
You should apply for adjusted earnings-related unemployment allowance within three months of the period covered by your application.
In most cases, wages are adjusted based on the payment day. The allowance depends on the wage income paid during the application period. The only exception to this might be when a full-time employee’s working hours have been reduced based on a temporary lay off. You can find more information about this below.
Adjustment based on the payment day means that any earnings that are paid to you during the application period affect your allowance regardless of the time period when the work has been done. For this reason, you might apply for a period during which you have been working but haven’t been paid any salary yet. In this case you should receive the allowance in full. On the other hand you might have application periods with no working hours but with a pay day. For that period, the income will be adjusted.
The adjustment procedure means that half your earnings will be deducted from the earnings-related unemployment allowance payable to a full-time unemployed person.
Example 1: You start a part-time job on February 9. You fill out an application for February 1 - 28 and include your working hours and days. Your salary for February is paid on March 15. There is no pay day on the application period and your allowance for February is paid in full.
Example 2: Your part-time job ends on February 18. You don’t have any work in March and fill out an application for March 1 - 31 as fully unemployed. The salary from your February is paid on March 15. You have a pay day during the application period which means that your allowance in March is adjusted based on the salary paid on March 15.
There is an exempt amount in adjusted allowance. You can earn the exempt amount before your earnings lower your unemployment allowance. If your application period is one month, the exempt amount is € 300. If your application period is four weeks, the amount is € 279. Half of any wages exceeding the exempt amount reduce the amount of your allowance. You should always report your working hours to the Fund even if your income before taxes is lower than the exempt amount.
TAKE NOTE! Between June 1, 2020 and September 30, 2021 the exempt amount has been temporarily raised to € 500 / month or € 465 / 4 weeks.
Any salary that has been earned from a full-time employment lasting more than two weeks is never adjusted. Salaries earned during a mandatory waiting period or from a time that you have received sickness allowance Kela are also excluded from the adjustment procedure. However, a salary earned before registering as a job seeker at the TE office might be adjusted. Contact the Unemployment Fund for more information about other earnings’ effect on your allowance.
The total of the adjusted allowances paid by the fund and any salary you receive may not exceed the amount of the salary forming the basis of your allowance. The maximum amount is calculated by deducting the earned income per day from the daily wages forming the basis of the allowance. If this amount is zero or below, no allowance is paid. In calculating the maximum amount, the exempt amount is not taken into account – all earned income counts.
Example 1: Your salary forming the basis of your allowance is € 1580 per month and your full daily allowance is € 51,65. You work part-time and earn € 1400 per month. When the exempt amount of € 300 is deducted from your salary income affecting your wages is € 1100. This would mean that your salary would lower your daily allowance by € 25,58 per day. However, due to the rule that salary and unemployment allowance cannot be more than € 1580 euros, the total amount of allowance is 1580-1400 = 180 euros.
Kela’s adjusted basic unemployment allowance does not have a maximum amount, which means that adjusted earnings-related unemployment allowance is always compared to the amount of adjusted basic unemployment allowance. This means that the amount of paid adjusted earnings-related unemployment allowance is always minimum the same amount that adjusted basic unemployment allowance would be.
Example 2: Your salary forming the basis of your allowance is € 1580 per month and your full daily allowance is € 51,65. You work part-time and earn € 1600 per month. The salary is more than € 1580, which according the maximum rule would been that you are not entitled to unemployment allowance. The amount of basic unemployment allowance is € 33,76 per day. When the impact of the months income, € 30,23 per day is deducted from the basic allowance, the amount of adjusted basic unemployment allowance is € 3,55 per day. This means that you will be paid adjusted earnings-related unemployment allowance € 3,55 per day.
If you work part-time, your salary is always adjusted based on the payment day. The allowance depends on the salary paid on the adjustment period. For this reason, if you are laid off from part-time work, your allowance is affected by the salary earned before you were laid off if it is paid on the adjustment period.
If you work part-time we advice you to stay registered as a jobseeker at the TE-office even after your lay off end. This way you can apply for earnings-related daily allowance outside your lay off as a part-time employee.
Example 1: You are laid off from your part-time job from March 1 to March 31. Your pay day for previous month’s work is always on the 10th of the following month. You fill out an application for March, the month that you have been laid off full-time. As you were paid February’s salary during the application period on March 10 your allowance will be adjusted. After March your lay off ends and you have your regular hours in April. You fill out on application with working hours for April. As you haven’t worked in March there is no pay day in April. For April you receive the unemployment allowance in full.
If your hours have been reduced due to a lay off (from a full time position) the adjustment of earnings-related allowance depends on the manner how your hours have been reduced. In lay off situations where your working hours vary daily, your income will be taken into account when adjusting your daily unemployment allowance. If a lay-off is implemented as full working and lay-off days, allowance is paid in full for full lay-off days. Under the law the number of days of compensation may not exceed five days a week and full working days reduce the maximum number of days to be compensated.
Example 2: You have been laid off for five full weekdays and you have worked two full working days at the weekend. Allowance can be paid for a maximum of three lay-off days and two lay-off days are rejected on the basis of the number of days of compensation.
You are not entitled to earnings-related allowances for periods of annual holiday earned from full-time work.
If the number of working hours paid on the payment day exceeds 80% of the full-time working hours in the collective agreement, you are not entitled to adjusted allowances for that application period. In calculating working hours, paid periods of annual holiday and sick leave are also taken into account.
Example: You work part-time and your pay day for previous month’s work is always on the 15th of the following month. Your pay day for the work done in May, in total 135 hours, is June 15. Your application for June is adjusted according to May’s salary paid in June. In June you are not entitled to allowances because your working hours in May exceeded 80 % of the working hours limit.
If you are laid off from full-time work, your working hours are examined on a calendar week basis. Always fill out the application for full calendar weeks. If the application period (e.g. calendar month) does not end on Sunday, please fill in the application form until the following Sunday.
If you work part-time or you have been laid off from part-time work, your working hours are calculated based on the application period. The application period is determined based on the pay period, either per month or four weeks. If the number of working hours paid on the payment day exceeds 80 % of the full-time working hours in the collective agreement, you are not entitled to adjusted allowances for that application period. In calculating working hours, paid periods of annual holiday and sick leave are also taken into account.
The Fund reviews the 26 week work requirement based on the time when income is earned. This means that salaries earned during the 26 week period are used as the basis for your earnings-related unemployment allowance. Sometimes we might ask for more information about your income and working hours, sick leave or holiday to make sure all work weeks of minimum 18 hours count towards the 26 week work requirement. To avoid any mix ups you can also attach your payslip to your application.
The maximum payment period will start over when you have satisfied the qualifying period of employment again. This will happen when you have worked another 26 weeks over a period of two years and four months. All weeks in which you have worked at least 18 hours are accepted as working weeks.
The days for which you have received allowance will count towards the 300-500 day maximum period of eligibility for earnings-related unemployment allowance. However, the days counted towards the maximum period will accumulate more slowly as adjusted allowance is not as high as the full amount of earnings-related unemployment allowance.